More than 1,700 packages of power line hardware, accessories, and meter boxes imported by a contractor on behalf of Kenya Power and Lighting Company (KPLC) risk auction due to a tax standoff with the taxman.
The packages, contained in some seven containers held at the Syokimau Inland Container Depot, are meant for use in the Last Mile Connectivity Project (LCMP), targeted at improving inclusion of households in the national grid and ultimately achieving universal access.
The Kenya Revenue Authority (KRA) said the goods, which arrived in the country in April 2026, have overstayed at its depot and will be auctioned next month to reclaim unpaid customs taxes if not cleared within the stipulated deadline.
KPLC, however, claims the goods are tax-exempt, as they’re meant for a last-mile electrification project it is executing on behalf of the government, and is funded through donors.
‘The goods listed in the KRA notice could have been imported by an Engineering, Procurement, and Construction (EPC) contractor engaged to implement a last-mile project,’ a KPLC spokesperson told Business Daily in an emailed response.
‘Under the terms of the project, the contractor bears sole responsibility for the procurement, supply, and installation of all materials necessary for the execution and completion of the works. This includes clearing of the goods from the port upon issuance of the exemption letter by the government.’
According to the spokesperson, the exemption letter, issued by the National Treasury, has already been provided to KRA for the commodities, but the taxman is yet to release the goods.
KRA did not respond to questions on why the goods continue to be withheld, nor did it confirm whether the exemption letter for the KPLC consignment has been received.
Items used for grid connection under the project, including metre boxes and transformers, are exempt from customs and value-added taxes.
KPLC, therefore, seeks exemption letters from the National Treasury for its contractors under the project, to facilitate duty-free importation of materials.
Typically, KRA holds imported goods deposited at its customs warehouses for 90 days pending payment of taxes, after which it publishes a notice alerting owners to collect them.
If the goods remain uncollected 30 days after the notice, KRA is allowed by law to dispose of the items at a public auction to recover unpaid customs taxes. The uncollected KPLC consignment could face a similar fate if the tax standoff isn’t resolved soon.
KPLC is currently executing the sixth phase of the last-mile connectivity project, which is financed by the African Development Bank.
The government has been implementing the project through Kenya Power and the Rural Electrification and Renewable Energy Corporation.
Under the programme, households close to or within 600 metres of an earmarked transformer are connected to power at subsidised rates of an average Sh15,000.
Beneficiaries initially paid Sh30,000 for the job. In the year ended June 2025, Kenya Power reported 163,092 last mile customers.
The first phase, funded by the AfDB, connected 314,200 customers in all 47 counties and was completed in 2020.
The second and third phases, funded by the World Bank and AfDB, respectively, were completed in 2022 and added a further 598,500 connections across 46 counties.
Ongoing phases launched in 2023 are targeting an extra 260,000 customers through funding from the European Union, European Investment Bank, French Development Agency and Japan International Cooperation Agency, with a combined investment of Sh24.2 billion.
A sixth phase funded by the AfDB started in 2025 and focuses on strengthening electricity network through substations and medium-voltage lines, while benefiting an estimated 150,000 customers.
Separately, the Government of Kenya, through Kenya Power and Rerec, has connected more than 163,000 customers under an ongoing programme covering all 47 counties.